OptionsHouse

Options Trading News

March 14, 2013  Thu 3:47 AM CT

BBY: SEE CHART GET CHAIN FIND STRATEGIES
Best Buy has gone on a surprising run this year, and one trader is betting that it has a bit more to go.

optionMONSTER's Heat Seeker system shows that a trader bought 2,500 April 22 calls for $0.73 and sold 5,000 April 24 calls for the bid price of $0.24. This is a new call spread, as the volume was well above the previous open interest of fewer than 500 contracts at each strike.

The call vertical, also known as a ratio spread because one strike saw twice as many contracts trade as the other, cost $0.25 to open. That is the maximum potential loss with BBY anywhere below $22, while the maximum gain would be realized with shares up at $24. Above that level, the faces the obligation to sell shares at that price. (See our Education section)

BBY gained 3.3 percent yesterday to finish at $20.96, its highest close since early July. The electronics retailer was at a 13-year low of $11.20 at the end of 2012 and has not closed above $24 in a year.
Share this article with your friends


Invest Like a Monster - Las Vegas: March 13-14

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Webinar Recording

Turbo Charge Your Trading Profits

Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

View more education articles »